Eastern Gateway reverses course amid Pell Grant fight: No new free college students

Dive Brief:

• Eastern Gateway Community College will not accept new students into its free college program and is only allowed to disburse Pell Grant funding to those who are already enrolled, the latest twist in more than a week of back-and-forth with federal regulators.
• The Ohio community college said Wednesday evening it was temporarily suspending new enrollment in its Free College Benefit Program after talking with lawyers and the state’s attorney general’s office. Only students enrolled by July 18 will be able to use federal financial aid funding for fall courses.
• New students won’t be admitted into the program until the U.S. Department of Education answers questions the college posed, according to Eastern Gateway. But the Ed Department said the program will need to be redesigned to conform with federal law.

Dive Insight:

Eastern Gateway, a 45,000-student public institution that operates campuses in Steubenville and Youngstown, has described the Free College Benefit program as a last-dollar initiative based on partnerships with local and national unions. The program also makes use of federal Pell Grant funding. 

Last-dollar programs draw down other sources of financial aid before they pay remaining gaps in the cost of students’ education. Pell Grants go to students with high financial need.

The Ed Department last week moved to cut off Eastern Gateway’s program, arguing it effectively charges students who receive Pell funding more than those who do not, which violates federal law. A department letter alleged that students receiving Pell Grants and state financial aid dollars had that funding applied toward their bills, then had remaining charges zeroed out by scholarships. Students who didn’t receive public financial aid dollars also had their balances reduced to zero. 

But regulators said little scholarship funding actually came from outside entities, meaning the federal government foots the bill for students who receive Pell Grants, while other students aren’t charged at all. Michael Geoghegan, the college’s president, has disagreed with that evaluation.

Eastern Gateway issued a statement Monday saying a federal official told Geoghegan the community college would be able to disburse Pell funding and operate the free college program this fall. Now in its latest statement, issued Wednesday evening, Eastern Gateway said the Ed Department postponed a scheduled meeting to give it more time to answer questions, and the college responded by suspending new enrollment in the free college program.

“We understand that this is a frustrating change of direction for our students, our staff, and the EGCC community,” Geoghegan said in a statement. “However, we know with certainty that this path will align with the most conservative elements of guidance received to date from DOE, and therefore it will avoid further scrutiny or potential misinterpretation while DOE works to provide us with answers.”

The course of action preserves the college’s integrity and leaves no doubt it is complying with Ed Department instructions, Geoghegan added.

Students who enrolled for the fall after July 18 cannot take part in the free college program. They also cannot make use of Title IV aid. Eastern Gateway said it is working to find alternative funding for them before the term begins Aug. 15.

An Ed Department spokesperson said in a statement that regulators had given the college “further clarification” about students who are enrolled for the fall.

“The U.S. Department of Education’s goal is to minimize disruption to students as we assess the impact of Eastern Gateway Community College’s (EGCC’s) treatment of students from low-income backgrounds who are eligible for Federal Pell Grants,” the statement said.